In the long-term continuous construction contract made between construction company A (joint contractor) and corporation B (client), the parties signed an amendment to change the contract amount of the blanket contract without changing the contents of the contract per term, and made an amendment to change the contract term of the blanket contract without changing the contents of the contract per term at all.

The opponent, the construction company A (joint contractor), argued that the parties made a separate agreement acknowledging the binding effect of the blanket contract by executing the amendment to change the contract price or contract term without amending the contracts per term. Against such assertions DR & AJU argued that there was no binding power in the blanket contract pursuant to the following reasons: in the long-term continuous construction contract, (i) at the time of conclusion of the first contract, there were only the contract per term without the separate blanket contract; (ii) the contents of the blanket contract such as the total construction cost and the total construction term were specified in the way of bookkeeping in each contract per term and each amendment; and (iii) although the total construction period was extended, the amendment to the contents of the blanket contract (total construction cost and total construction term) was not concluded separately from the contract per term.

The Supreme Court accepted DR & AJU’s argument and remanded the appellate judgment, commenting that there was illegality of misunderstanding the legal principle by the appellate court; the appellate court had determined that corporation B should make additional payments as there was legal binding power in the extended total construction term under the blanket contract by interpreting the blanket contract was separately concluded and construction cost was increased due to the extension of the construction period.

This case has huge significance. It was the first judgment that the Supreme Court pronounced it did not acknowledge the binding effect of the blanket contract where the blanket contract was separately made to change the total construction period or the total contract amount without amending the contract per term since the Supreme Court 2014Da235189 Decision rendered on October 30, 2018. The 2018 Judgment denied the binding effect of the blanket contract in the long-term continuous construction contract where the total construction cost and total construction term were included in the way of bookkeeping in the contract per term.